Indonesia’s increasing oil prices
By: Adellyn Garcia
March 4, 2022
Scarcity of cooking oil observed in markets (Photo via https://img.beritasatu.com/cache/beritasatu/910x580-2/1644752696.jpg)
Ever since the end of 2021, an inflation in the price of cooking oils has been observed in Indonesia. It was suspected by the Business Competition Supervisory Commission or KPPU that cartel practice might be the reason behind this incident.
Cartel practice is defined as the act where multiple independent businesses and/or organisations collude together in order to manipulate the price of a product or service. They do so by reducing the supply of goods and services, price-fixing, collusive bidding, and market craving. By reducing the supply of goods and services, demands for these items will increase due to its scarcity leading to an increase in market price.
This problem was predominantly shown back in November 2021, where branded cooking oils were priced for Rp. 24.000 per litre. It was only after government intervention was it reduced to Rp. 14.000 per litre. Even so, this issue itself has yet to reach its end.
As of now, an individual is only allowed to purchase one package of 2 litre cooking oil in one store to avoid hoarding. The scarcity of cooking oil supplies and this new limit has proved to be an issue for many citizens of Indonesia, especially business owners who frequently use cooking oils as a daily necessity.